GlobeNewswire Inc | Oct 30, 2020 01:26PM EDT

October 30, 2020

-- Third Quarter 2020 Net Income of $1.53 per Basic Common Share -- Common Equity Tier 1 and Total Capital Ratios of 12.3% and 13.6%, Respectively -- Non-Performing Assets were 0.36% of Total Assets Compared with 0.35% at December 31, 2019 -- Book Value and Tangible Book Value Per Common Share Increased 7% and 8%, Respectively in 2020

LAKEVILLE, Conn., Oct. 30, 2020 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. (Salisbury), (NASDAQ Capital Market: SAL), the holding company for Salisbury Bank and Trust Company (the Bank), announced results for its third quarter ended September 30, 2020.

Net income allocated to common shareholders was $4.3 million, or $1.53 per common share, for the quarter ended September 30, 2020 (third quarter 2020), compared with $2.7 million, or $0.96 per common share, for the second quarter ended June 30, 2020 (second quarter 2020), and $2.9 million, or $1.06 per common share, for the third quarter ended September 30, 2019 (third quarter 2019). Results for third quarter 2020 included a loan loss provision of $686 thousand, and a non-recurring non-taxable gain of $601 thousand, or $0.21 per basic common share, related to proceeds received from a bank-owned life insurance policy (BOLI) due to the death of a covered former employee.

Salisburys President and Chief Executive Officer, Richard J. Cantele, Jr., stated, I am extremely proud of our Salisbury Bank team, which has successfully met the challenges of serving our customers and communities during these difficult times. During this pandemic we extended $100 million in PPP loans and worked with numerous commercial and residential customers to accommodate their needs for temporary loan payment deferrals. Our efforts have assisted the economic survival of our customers. We reported strong earnings for the third quarter and we continued to bolster our allowance for loan losses and our capital base. We have also been able to increase book value and tangible book value per common share by 7% and 8%, respectively so far for this year. As we enter the colder months, however, the uncertainty surrounding COVID-19 and its impact on businesses is extremely high. As a result, we continue to closely monitor our loan portfolio and our lenders constantly communicate with our customers. Salisbury remains committed to providing outstanding customer service and supporting our local communities during this crisis.

Net-Interest and Dividend Income

Tax equivalent net interest income of $10.1 million for the third quarter 2020 increased $313 thousand, or 3.2%, versus second quarter 2020, and increased $1.3 million, or 14.4%, versus third quarter 2019. Interest income was essentially unchanged compared to second quarter 2020 and third quarter 2019. Third quarter 2020 included PPP fees and interest of $651 thousand compared with $561 thousand in second quarter 2020. The cost of interest bearing liabilities declined $0.2 million, or 18.8%, from second quarter 2020 and declined $1.3 million, or 54.3%, from third quarter 2019.

Average earning assets increased $42.1 million, or 3.6%, versus second quarter 2020, and increased $150.9 million, or 14.1%, versus third quarter 2019. Average earning assets for third quarter 2020 included average PPP loan balances of $97.0 million. Average total interest bearing liabilities increased $23.0 million, or 2.8%, versus second quarter 2020 and increased $64.9 million, or 8.4%, versus third quarter 2019. The increase from third quarter 2019 primarily reflected the funding of PPP loans.

The tax equivalent net interest margin for the third quarter 2020 was 3.29% compared with 3.31% for the second quarter 2020 and 3.29% for the third quarter 2019. See SUPPLEMENTAL INFORMATION Net Interest and Dividend Income on pages 8-9 of this release for additional details.

Non-Interest Income

Non-interest income of $3.3 million for third quarter 2020 increased $1.0 million compared with second quarter 2020 and third quarter 2019. Non-interest income for third quarter 2020 included a non-recurring non-taxable BOLI gain of $601 thousand due to the death of a covered former employee. The increase in non-interest income from the comparative quarters also reflected higher realized gains on the sale of residential mortgages.

Trust and Wealth Advisory fees of $1.1 million increased slightly compared with both second quarter 2020 and third quarter 2019. Assets under administration were $748.2 million as of September 30, 2020 compared with $704.1 million at June 30, 2020 and $752.5 million as of September 30, 2019. Discretionary assets under administration of $515.0 million in third quarter 2020 increased from $480.5 million in second quarter 2020 and $475.5 million in third quarter 2019. The growth from second quarter 2020 primarily reflected higher market valuations whereas the growth versus third quarter 2019 primarily reflected new business activity. Non-discretionary assets under administration were $233.2 million in third quarter 2020 compared with $223.6 million in second quarter 2020 and $277.0 million in third quarter 2019. The increase from second quarter 2020 primarily reflected higher valuations whereas the decline from third quarter 2019 primarily reflected a lower valuation of shares in a partnership for one significant client relationship for which the trust and wealth business recorded only a nominal annual fee.

Service charges and fees of $711 thousand increased $113 thousand versus second quarter 2020 and decreased $292 thousand versus third quarter 2019. The increase from second quarter 2020 primarily reflected higher interchange fees whereas the decline from third quarter 2019 reflected lower deposit fees. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $289 thousand and $558 thousand of deposit and transaction fees in the third quarter and the nine month period ended September 30, 2020, respectively.

Income from sales and servicing of mortgage loans of $736 thousand increased $418 thousand versus second quarter 2020 and increased $618 thousand from third quarter 2019. Mortgage loans of $26.6 million were sold during the third quarter 2020 compared with sales of $14.7 million for second quarter 2020 and $5.6 million in third quarter 2019.

Non-Interest Expense

Non-interest expense of $7.3 million for third quarter 2020 increased $470 thousand versus second quarter 2020 and increased $75 thousand versus third quarter 2019. Compensation expense of $4.2 million for third quarter 2020 increased $727 thousand from second quarter 2020 and decreased $48 thousand versus third quarter 2019. The second quarter 2020 included the deferral of approximately $540 thousand of compensation costs associated with originating PPP loans. These deferred costs will be amortized into income over the term of the PPP loans as an offset to loan interest income, which is a component of net interest margin. Third quarter 2020 also reflected higher salary expense and production accruals, which were driven by increased loan origination volume.

Excluding compensation, other non-interest expenses of $3.1 million for third quarter 2020 decreased $257 thousand from second quarter 2020 and increased $123 thousand from third quarter 2019. The decrease from second quarter 2020 primarily reflected lower consulting and director fees as well as a decline in community support donations, which were accelerated in second quarter 2020. The increase from third quarter 2019 primarily reflected FDIC assessment credits recorded in the prior year third quarter.

The effective income tax rates for third quarter 2020, second quarter 2020 and third quarter 2019 were 17.3%, 18.1% and 18.0%, respectively. The lower tax rate in third quarter 2020 primarily reflected the non-taxable BOLI proceeds received during the quarter.

Loans

Gross loans for third quarter 2020 of $1.0 billion included $99.9 million in PPP loans, which are categorized as commercial & industrial loans in the below table, and net deferred fees of $2.3 million. Excluding PPP loans, gross loans receivable were $947.0 million at September 30, 2020, compared with $955.8 million at June 30, 2020, and $923.9 million at September 30, 2019. Including PPP loans, the ratio of gross loans to deposits for third quarter 2020 was 95.4% compared with 97.0% for second quarter 2020 and 95.6% for third quarter 2019. Balances by loan type for the comparative periods were as follows:

Loan Type Q3 2020 Q2 2020 Q3 2019Residential Real Estate $ 429,221 $ 436,364 $ 421,843Commercial Real Estate 333,412 323,634 296,302Commercial & Industrial 237,448 247,440 164,078Farm Land 3,295 3,324 3,686Vacant Land 13,694 13,879 8,111Municipal 20,797 20,707 22,260Consumer 7,686 7,886 6,290Deferred (Fees) Costs (959) (1,339) 1,359Gross Loans Receivable $ 1,044,594 $ 1,051,895 $ 923,929

Asset Quality

In March 2020, Salisbury implemented a loan payment deferral program which allowed residential, commercial and consumer borrowers, who have been adversely affected by the COVID-19 pandemic, to defer loan payments for up to three months. Customers may also apply for additional deferments. As of September 30, 2020, loan payments were deferred on 21 residential and consumer loans ($7 million loan balance) and 37 commercial loans ($56 million loan balance).

Non-performing assets decreased $0.1 million during third quarter 2020 to $4.7 million, or 0.36% of total assets at September 30, 2020, from $4.8 million, or 0.37% of total assets at June 30, 2020, and decreased $1.0 million from $5.7 million, or 0.50% of total assets, at September 30, 2019.

The amount of total impaired and potential problem loans decreased $0.1 million during the third quarter 2020 to $26.8 million, or 2.56% of gross loans receivable, at September 30, 2020 compared to $26.9 million, or 2.55% of gross loans receivable, at June 30, 2020, and increased $4.2 million from $22.6 million, or 2.44% of gross loans receivable, at September 30, 2019.

Accruing loans receivable 30-to-89 days past due decreased $1.0 million during third quarter 2020 to $1.6 million, or 0.16% of gross loans receivable, from $2.7 million, or 0.25% of gross loans receivable at June 30, 2020, and decreased $0.2 million from $1.8 million, or 0.19% of gross loans receivable at September 30, 2019.

The allowance for loan losses at September 30, 2020 was $13.0 million compared with $12.4 million at June 30, 2020 and $8.8 million at September 30, 2019. The provision for loan losses expense was $0.7 million for third quarter 2020 versus $1.8 million for second quarter 2020, and $94 thousand for third quarter 2019. The provision for third quarter reflected managements assessment of the impact of the COVID-19 pandemic on certain qualitative and environmental factors and impaired loans. Net loan charge-offs were $56 thousand for the third quarter 2020, $53 thousand for second quarter 2020 and $135 thousand for the third quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.24% for the third quarter 2020, versus 1.18% for second quarter 2020 and 0.96% for third quarter 2019. Excluding PPP loans and deferred net fees, the ratio of the allowance for loan losses to gross loans was 1.37% for third quarter 2020 compared with 1.29% for second quarter 2020.

Salisbury endeavors to work constructively to resolve its non-performing loan issues with customers. Substantially all non-performing loans are collateralized with real estate and the repayment of such loans is largely dependent on the return of such loans to performing status or the liquidation of the underlying real estate collateral.

Deposits and Borrowings

Deposits of $1.1 billion at September 30, 2020 increased $9.5 million from June 30, 2020 and increased $129.0 million from September 30, 2019. Deposits at September 30, 2020 included brokered deposits, including CDARS one-way buys, of $18.0 million compared with $38.2 million at June 30, 2020 and $32.9 million at September 30, 2019. Average total deposits for third quarter 2020 were $1.1 billion compared with $1.0 billion at June 30, 2020 and $938.5 million at September 30, 2019. Average total deposits for third quarter 2020 included average brokered deposits of $24.9 million compared with $44.2 million for second quarter 2020 and $31.6 million for third quarter 2019.

FHLB advances of $43.9 million at September 30, 2020 decreased $11.2 million from June 30, 2020 and increased $6.1 million from September 30, 2019. Salisburys excess borrowing capacity at FHLBB was approximately $234 million at September 30, 2020.

Capital

Book value per common share increased $1.33 during the third quarter 2020 to $42.99 per share and increased $3.47 from the third quarter 2019. Tangible book value per common share increased $1.36 during third quarter 2020 to $37.87 and increased $3.63 from the third quarter 2019.

Shareholders equity increased $3.8 million in third quarter 2020 to $122.2 million at September 30, 2020 as net income of $4.4 million and the issuance of restricted stock awards of $0.2 million were partly offset by common stock dividends paid of $0.8 million.

The Banks regulatory capital ratios remain in compliance with regulatory well capitalized requirements. At September 30, 2020, the Banks Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.93%, 13.6%, and 12.3%, respectively, compared with regulatory well capitalized minimums of 5.00%, 10.00%, and 6.5%, respectively.

Dividends on Common Shares

The Board of Directors of Salisbury declared a $0.29 per common share quarterly cash dividend at its October 30, 2020 meeting. The dividend will be paid on November 27, 2020 to shareholders of record as of November 13, 2020.

Background

Salisbury Bancorp, Inc. is the parent company of Salisbury Bank and Trust Company, a Connecticut chartered commercial bank serving the communities of northwestern Connecticut and proximate communities in New York and Massachusetts, since 1848, through full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut; Great Barrington, South Egremont and Sheffield, Massachusetts; and Dover Plains, Fishkill, Millerton, Newburgh, New Paltz, Poughkeepsie, and Red Oaks Mill, New York. The Bank offers a broad spectrum of consumer and business banking products and services as well as trust and wealth advisory services.

Forward-Looking Statements

This news release may contain statements relating to Salisburys and the Banks future results that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions and estimates made by management using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions, including among others: changes in market interest rates and general and regional economic conditions; changes in laws and regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios, technological changes and cybersecurity matters, and other factors that may be described in Salisburys quarterly reports on Form 10-Q and its annual report on Form 10-K, which are available at the Securities and Exchange Commissions website (www.sec.gov) and to which reference is hereby made. Forward-looking statements made by Salisbury in this news release speak only as of the date they are made. Events or other facts that could cause Salisburys actual results to differ may arise from time to time and Salisbury cannot predict all such events and factors. Salisbury undertakes no obligation to publicly update any forward-looking statement unless as may be required by law.

Investor presentation slides, which include a review of financial results and trends through the period ended September 30, 2020, are available in the Shareholder Relations section of Salisburys website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations simultaneously with this Release.

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data) September 30, December 31, 2020 2019ASSETS (unaudited) Cash and due from banks $ 6,828 $ 7,406Interest bearing demand deposits with other banks 88,513 19,479Total cash and cash equivalents 95,341 26,885Interest bearing Time Deposits with Financial 750 750InstitutionsSecurities Available-for-sale at fair value 95,720 91,801CRA mutual fund at fair value 916 882Federal Home Loan Bank of Boston stock at cost 3,158 3,242Loans held-for-sale 2,761 332Loans receivable, net (allowance for loan losses: 1,031,593 927,413$13,001 and $8,895)Other real estate owned - 314Bank premises and equipment, net 18,727 17,385Goodwill 13,815 13,815Intangible assets (net of accumulated 748 995amortization: $5,132 and $4,884)Accrued interest receivable 6,055 3,415Cash surrender value of life insurance policies 17,572 20,580Deferred taxes 2,252 1,249Other assets 3,352 3,390Total Assets $ 1,292,760 $ 1,112,448LIABILITIES and SHAREHOLDERS' EQUITY Deposits Demand (non-interest bearing) $ 313,742 $ 237,852Demand (interest bearing) 201,760 153,314Money market 270,097 239,504Savings and other 181,691 161,112Certificates of deposit 127,851 127,724Total deposits 1,095,141 919,506Repurchase agreements 10,885 8,530Federal Home Loan Bank of Boston advances 43,880 50,887Subordinated debt 9,877 9,859Note payable 218 246Finance lease obligations 1,685 1,718Accrued interest and other liabilities 8,834 8,047Total Liabilities 1,170,520 998,793Shareholders' Equity Common stock - $0.10 per share par value Authorized: 5,000,000 Issued: 2,843,292 and 2,825,912 Outstanding: 2,843,292 and 2,825,912 284 283Unearned compensation - restricted stock awards (906) (795)Paid-in capital 45,171 44,490Retained earnings 74,995 68,320Accumulated other comprehensive income, net 2,696 1,357Total Shareholders' Equity 122,240 113,655Total Liabilities and Shareholders' Equity $ 1,292,760 $ 1,112,448

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Three months ended Nine months endedPeriods ended September 30,(in thousands except share 2020 2019 2020 2019data)Interest and dividend income Interest and fees on loans $ 10,362 $ 10,045 $ 30,662 $ 29,859Interest on debt securities Taxable 396 530 1,260 1,734Tax exempt 157 166 513 355Other interest and dividends 87 282 229 761Total interest and dividend 11,002 11,023 32,664 32,709incomeInterest expense Deposits 764 1,879 3,261 5,674Repurchase agreements 6 9 16 16Finance lease 35 43 106 135Note payable 3 4 11 12Subordinated debt 156 156 468 468Federal Home Loan Bank of 113 265 472 956Boston advancesTotal interest expense 1,077 2,356 4,334 7,261Net interest and dividend 9,925 8,667 28,330 25,448incomeProvision for loan losses 686 94 4,198 539Net interest and dividendincome after provision for 9,239 8,573 24,132 24,909loan lossesNon-interest income Trust and wealth advisory 1,068 1,023 3,129 2,973Service charges and fees 711 1,003 2,214 2,935Gains on sales of mortgage 707 42 1,020 50loans, netMortgage servicing, net 29 76 162 232Gains on CRA mutual fund - 6 22 29Gains (losses) onavailable-for-sale securities, 34 (9) 216 263netBOLI income and gains 719 86 986 252Other 18 29 97 97Total non-interest income 3,286 2,256 7,846 6,831Non-interest expense Salaries 3,114 3,042 8,375 8,994Employee benefits 1,061 1,181 3,244 3,408Premises and equipment 1,005 974 2,897 2,950Data processing 569 534 1,666 1,620Professional fees 635 572 2,020 1,690OREO gains, losses and - 84 - 406write-downs, netCollections and other real 108 119 212 328estate ownedFDIC insurance 123 (9) 331 294Marketing and community 126 141 419 448supportAmortization of intangibles 78 93 247 297Other 440 453 1,572 1,398Total non-interest expense 7,259 7,184 20,983 21,833Income before income taxes 5,266 3,645 10,995 9,907Income tax provision 910 657 1,858 1,781Net income $ 4,356 $ 2,988 $ 9,137 $ 8,126Net income available to common $ 4,288 $ 2,940 $ 9,006 $ 8,016stock Basic earnings per common $ 1.53 $ 1.06 $ 3.22 $ 2.88shareDiluted earnings per common $ 1.53 $ 1.05 $ 3.21 $ 2.87shareCommon dividends per share $ 0.29 $ 0.28 $ 0.87 $ 0.84

Salisbury Bancorp, Inc. and Subsidiary

SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)

At or for the quarters ended(in thousands,except per share Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019amounts andratios)Total assets $1,292,760 $1,287,137 $1,145,751 $1,112,448 $1,144,240Loans receivable, 1,031,593 1,039,524 949,142 927,413 915,083netTotal securities 99,794 93,717 94,966 95,925 98,270Deposits 1,095,141 1,085,599 965,620 919,506 966,178FHLBB advances 43,880 55,118 40,932 50,887 37,828Shareholders? 122,240 118,444 116,143 113,655 111,580equityWealth assetsunder 748,188 704,052 639,457 777,503 752,467administrationDiscretionarywealth assets 514,988 480,456 425,359 498,737 475,482underadministrationNon-discretionarywealth assets 233,200 223,596 214,098 278,766 276,985underadministrationNon-performing 4,681 4,815 3,188 3,621 5,370loansNon-performing 4,681 4,815 3,188 3,935 5,687assetsAccruing loanspast due 30-89 1,638 2,656 6,109 2,077 1,784daysNet interest and 9,925 9,617 8,787 8,665 8,667dividend incomeNet interest anddividend income, 10,101 9,786 8,954 8,839 8,830tax equivalent^(^1)Provision for 686 1,806 1,706 417 94loan lossesNon-interest 3,286 2,316 2,245 2,419 2,256incomeNon-interest 7,259 6,789 6,936 7,080 7,184expenseIncome before 5,266 3,338 2,390 3,587 3,645income taxesIncome tax 910 604 343 578 657provisionNet income 4,356 2,734 2,047 3,009 2,988Net incomeallocated to 4,288 2,691 2,013 2,960 2,940commonshareholders Per share data Basic earnings $1.53 $0.96 $0.72 $1.06 $1.06per common shareDiluted earnings 1.53 0.96 0.72 1.06 1.05per common shareDividends per 0.29 0.29 0.29 0.28 0.28common shareBook value per 42.99 41.66 41.05 40.22 39.52common shareTangible bookvalue per common 37.87 36.51 35.85 34.98 34.24share - Non-GAAP^(^2)Common sharesoutstanding at 2,843 2,843 2,829 2,826 2,823end of period (inthousands)Weighted averagecommon sharesoutstanding, tocalculate basic 2,799 2,796 2,788 2,781 2,783earnings pershare (inthousands)Weighted averagecommon sharesoutstanding, tocalculate diluted 2,807 2,803 2,797 2,794 2,795earnings pershare (inthousands) Profitability ratiosNet interestmargin (tax 3.29% 3.31% 3.35% 3.34% 3.29%equivalent) ^(1)Efficiency ratio 56.33 56.23 61.36 61.81 62.90^(3)Effective income 17.28 18.11 14.35 16.11 18.02tax rateReturn on average 1.34 0.89 0.73 1.07 1.05assetsReturn on averagecommon 14.14 9.36 7.07 10.56 10.73shareholders?equity Credit quality ratiosNon-performingloans to loans 0.45 0.46 0.33 0.39 0.58receivable, grossAccruing loanspast due 30-89 0.16 0.25 0.64 0.22 0.19days to loansreceivable, grossAllowance forloan losses to 1.24 1.18 1.11 0.95 0.96loans receivable,grossAllowance forloan losses to 277.8 256.9 333.0 245.64 164.73non-performingloansNon-performingassets to total 0.36 0.37 0.28 0.35 0.50assets Capital ratios Commonshareholders' 9.46% 9.20% 10.14% 10.22% 9.75%equity to assetsTangible commonshareholders'equity to 8.42 8.16 8.97 9.01 8.56tangible assets -Non-GAAP^(^2)Tier 1 leverage 8.93 8.95 9.65 9.60 9.27capital ^(4)Total risk-based 13.60 13.15 12.97 12.84 12.58capital ^(4)Common equitytier 1 capital ^ 12.35 11.90 11.79 11.83 11.57(4)

(1)Adjusted to reflect the U.S. federal statutory benefit on income derived from tax-exempt securities and loans. (2) Refer to schedule labeled Supplemental Information Non-GAAP Financial Measures.(3) Calculated as follows: Noninterest expense before OREO expense, amortization of intangibles, and goodwill impairments as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains from securities transactions and litigation expenses. (4)Represents the capital ratios of the Bank.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION Non-GAAP Financial Measures (unaudited)

At or for thequarters ended(inthousands,except per Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 share amountsand ratios)CommonShareholders' $ 122,240 $ 118,444 $ 116,143 $ 113,655 $ 111,580 EquityLess: (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )GoodwillLess:Intangible (748 ) (825 ) (908 ) (995 ) (1,086 )assetsTangibleCommon $ 107,677 $ 103,804 $ 101,420 $ 98,845 $ 96,679 Shareholders'EquityTotal Assets $ 1,292,760 $ 1,287,137 $ 1,145,751 $ 1,112,448 $ 1,144,240 Less: (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )GoodwillLess:Intangible (748 ) (825 ) (908 ) (995 ) (1,086 )assetsTangible $ 1,278,197 $ 1,272,497 $ 1,131,028 $ 1,097,638 $ 1,129,339 Total AssetsCommon Shares 2,843 2,843 2,829 2,826 2,823 outstanding Book valueper Common $ 42.99 $ 41.66 $ 41.05 $ 40.22 $ 39.52 Share ? GAAPTangible bookvalue per 37.87 36.51 35.85 34.98 34.24 Common Share- Non-GAAPTangiblecommonshareholders?equity to 8.42 % 8.16 % 8.97 % 9.01 % 8.56 %tangibletotal assets- Non-GAAPConsolidated: Non-interest $ 7,259 $ 6,789 $ 6,936 $ 7,080 $ 7,184 expenseLess:Amortizationof core (78 ) (83 ) (87 ) (91 ) (93 )depositintangiblesLess:Foreclosedpropertyexpense 2 (7 ) 13 (27 ) (115 )includingOREO gains,losses andWrite downsAdjustednon-interest $ 7,183 $ 6,699 $ 6,862 $ 6,962 $ 6,976 expenseNet interestand dividend $ 10,101 $ 9,786 $ 8,955 $ 8,839 $ 8,831 income, taxequivalentNon-interest 3,286 2,316 2,245 2,419 2,256 income(Gains)losses on (34 ) (188 ) (15 ) 4 3 securitiesBOLI proceeds (601 ) - - - - Adjusted $ 12,752 $ 11,914 $ 11,185 $ 11,262 $ 11,090 revenueEfficiencyRatio ? 56.33 % 56.23 % 61.36 % 61.81 % 62.90 %Non-GAAP ^1

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q3 2020: 54.76%; Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%; Q3 2019: 61.13%. If Q3 2020 results were normalized to exclude the impact of the COVID-19 pandemic, non-interest expense would increase by $48 thousand for deferred compensation costs and revenue would be adjusted to include waived deposit fees of $289 thousand and exclude PPP loan interest and fee income of $251 thousand and $400 thousand, respectively. The resulting normalized efficiency ratio for Q3 2020 would have been 58.37% or 56.94%, excluding trust & wealth advisory.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION Net Interest and Dividend Income (unaudited)

At or for the Average Balance Income / Expense Average Yield / Ratequarters ended(dollars in Q3 2020 Q2 2020 Q3 2019 Q3 Q2 Q3thousands) Q3 2019 Q3 2020 Q2 2020 2020 2020 2019Loans (a)(d) $ 1,049,313 $ 1,038,551 $ 920,946 $ 10,485 $ 10,428 $ 10,158 3.97% 4.02% 4.41%Securities (c) 89,220 86,987 96,317 606 634 747 2.72 2.92 3.10(d)FHLBB stock 3,440 3,580 3,024 34 39 46 3.96 4.36 6.08Short term funds 78,306 49,105 49,057 53 12 236 0.27 0.10 1.92(b)Total earning 1,220,279 1,178,223 1,069,344 11,178 11,113 11,187 3.64 3.77 4.18assetsOther assets 64,943 60,288 57,196 Total assets $ 1,285,222 $ 1,238,511 $ 1,126,540 Interest-bearing $ 195,253 $ 172,811 $ 156,803 110 103 160 0.22 0.24 0.41demand depositsMoney market 258,257 237,667 242,310 195 239 700 0.30 0.40 1.16accountsSavings and 176,963 171,436 165,297 69 102 323 0.15 0.24 0.78otherCertificates of 135,238 157,288 152,475 390 544 697 1.15 1.38 1.83depositTotalinterest-bearing 765,711 739,202 716,885 764 988 1,880 0.40 0.53 1.05depositsRepurchase 12,218 4,773 7,266 6 4 9 0.20 0.34 0.50agreementsCapital lease 2,928 2,987 4,356 35 35 42 4.80 4.69 3.86Note payable 221 231 258 3 4 4 6.08 6.93 6.20Subordinateddebt (net of 9,872 9,866 9,849 156 156 156 6.32 6.32 6.34issuance costs)FHLBB advances 44,522 55,374 31,983 113 140 266 0.99 1.01 3.33Totalinterest-bearing 835,472 812,433 770,597 1,077 1,327 2,357 0.51 0.65 1.22liabilitiesDemand deposits 321,392 302,965 238,689 Other 7,592 6,029 6,669 liabilitiesShareholders? 120,766 117,084 110,585 equityTotalliabilities & $ 1,285,222 $ 1,238,511 $ 1,126,540 shareholders?equityNet interest $ 10,101 $ 9,786 $ 8,830 incomeSpread oninterest-bearing 3.13 3.12 2.96fundsNet interest 3.29 3.31 3.29margin (e)

(a)Includes non-accrual loans.(b)Includes interest-bearing deposits in other banks and federal funds sold.(c)Average balances of securities are based on historical cost.(d)Includes tax exempt income benefit of $176,000, $170,000 and $164,000, respectively, for Q3 2020, Q2 2020 and Q3 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019.(e)Net interest income divided by average interest-earning assets.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION Net Interest and Dividend Income (unaudited)

Nine months Average Yieldended September Average Balance Income / Expense / Rate30,(dollars in 2020 2019 2020 2019 2020 2019thousands)Loans (a)(d) $ 1,012,070 $ 920,925 $ 31,010 $ 30,179 4.07% 4.36%Securities (c) 88,603 97,337 1,939 2,201 2.92 3.02(d)FHLBB stock 3,354 3,487 106 183 4.24 7.03Short term funds 50,312 38,682 123 577 0.33 2.00(b)Total earning 1,154,339 1,060,431 33,178 33,140 3.83 4.18assetsOther assets 63,265 56,769 Total assets $ 1,217,604 $ 1,117,200 Interest-bearing $ 174,299 $ 154,885 331 458 0.25 0.40demand depositsMoney market 245,581 217,290 994 1,732 0.54 1.07accountsSavings and 170,880 177,873 405 1,229 0.32 0.92otherCertificates of 149,080 164,979 1,531 2,255 1.37 1.83depositTotalinterest-bearing 739,840 715,027 3,261 5,674 0.59 1.06depositsRepurchase 7,572 4,463 16 16 0.29 0.48agreementsCapital lease 2,988 4,314 106 135 4.74 4.16Note payable 231 266 11 12 6.08 6.06Subordinateddebt (net of 9,867 9,844 468 468 6.32 6.34issuance costs)FHLBB advances 45,667 42,938 472 957 1.36 2.94Totalinterest-bearing 806,165 776,852 4,334 7,262 0.72 1.25liabilitiesDemand deposits 286,608 226,182 Other 6,847 6,560 liabilitiesShareholders? 117,984 107,606 equityTotalliabilities & $ 1,217,604 $ 1,117,200 shareholders?equityNet interest $ 28,844 $ 25,878 incomeSpread oninterest-bearing 3.11 2.93fundsNet interest 3.32 3.24margin (e)

(a)Includes non-accrual loans.(b)Includes interest-bearing deposits in other banks and federal funds sold.(c)Average balances of securities are based on historical cost.(d)Includes tax exempt income benefit of $514,000 and $432,000, respectively for 2020 and 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019.(e)Net interest income divided by average interest-earning assets.

Source: Salisbury Bancorp, Inc.

Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer860-435-9801 or rcantele@salisburybank.com